Pet Trusts: An Important Planning Tool

By Jim D. Sarlis

Jim D. Sarlis concentrates on Elder Law and Trusts & Estates. While his office is now in Rosedale, Queens, he was born and raised in Hell's Kitchen in Manhattan, where he attended Columbia University, Fordham University School of Law, and NYU School of Law's Master of Laws (LL.M.) program in taxation. Mr. Sarlis has been a guest lecturer at New York Law School on the subject of Will Drafting, and has taught Real Estate Law and Legal Writing in the ABA-governed paralegal program of the City University of New York. Mr. Sarlis is admitted to the New York State Bar, the Federal Courts for the Southern and Eastern Districts of New York, and the U.S. Tax Court. His household includes a lovable dog named Cody, and a somewhat less lovable cat named Snickers.

We Americans love our pets and consider them members of the family. We treat them like our children, and even refer to ourselves as their Mommies and Daddies.1 While it is true that we take care of them, the relationship is far from one-sided. In addition to unconditional love, there are many other benefits our animal friends bestow upon us. Elders and people with health issues, in particular, are known to derive therapeutic benefits from interaction with animals. These benefits include lower blood pressure and decreased anxiety, increased circulation and mental sharpness, and reduced loneliness due to the enhanced opportunities for social interaction and the distraction of focusing on the pets' needs.2 It is also well documented that the presence of pets in nursing homes increases the longevity of residents.3

As with any loved ones for whom we are responsible, the concern arises: How can we make sure that our pets continue to receive care if the time comes when we ourselves can no longer provide it? One possible answer is a pet trust.

What is a pet trust?

A pet trust is a legal arrangement whereby a person can provide for the care and maintenance of dogs, cats, and other animals in the event of the person's disability or death. Although they may take different forms and have to comply with varying laws in different jurisdictions, pet trusts are set up much like any other trust. The "grantor" is the person who creates the trust. The "beneficiary" is the pet or other animal that is to be cared for. The "trustee" is the person who holds legal title to the assets for the benefit of the animal. In addition, a "guardian" or "caretaker" is appointed to actually care for the pet, and even an "enforcer" can be named to make sure the trust terms are followed. Like other trusts, a pet trust can be inter vivos, taking effect during the grantor's lifetime, or testamentary, taking effect upon the grantor's death.

Providing for pet care, past and present: Defining the issue

The public is mesmerized by the multi-million-dollar pet care cases emphasized in the media.4 However, most people have more modest concerns. They just want to make sure that someone will take care of their pets, and see to it that their pets will have food, shelter, and veterinary care. The problem was that, prior to the enactment of pet trust legislation, if a pet owner wanted to earmark money for the care of a pet, there was no functional mechanism to do so. For example, a regular bequest made to an individual with the expectation that he or she would act as the caretaker of the pet lacked any oversight or enforcement mechanism to make sure the person did, in fact, use the money to take care of the pet. Similarly, money left in a regular trust attempting to name the pet itself as the beneficiary would fail5 since pets and other animals cannot be beneficiaries of Wills and traditional trusts because of their legal classification as personal property in every U.S. jurisdiction.6

This left people who wanted to protect their pets and arrange for their care with little choice but to try some creative things in an attempt to do so. Thus, in the past, people tried to ensure a pet's well being after the owner's death by making a conditional testamentary gift to a friend or family member for the pet's care and maintenance - the condition being the care of the pet.7 However, conditional gifts are difficult to enforce, since there is no trustee or overseer to ensure that the funds given to the caretaker are actually used for the benefit of the pet.

Pet trusts to the rescue: their nuts-and-bolts and advantages

Unlike these prior imperfect methods, a pet trust is designed specifically for pet care planning and alleviates all of these shortcomings. First and foremost, the pets or other animals are expressly recognized as the beneficiaries. As with other trusts, the maker of the trust may specify a trustee and a successor trustee. The trustee should be someone other than the individual who will be the pets' caretaker. The caretaker can be an individual or an organization, but most owners select a friend or relative who knows the pets and is ready, willing, and able to care for them. If no friend or relative can be found to take the pet, another good choice would be a charitable organization whose function is to care for or place companion animals; for example, a humane society or shelter might agree to accept the animal along with a cash bequest to cover expenses.8 Alternate caretakers may be named as well. The trust must also name a "remainder beneficiary" - i.e., the individual or organization that will receive any funds left in the trust after the death of the last pet beneficiary. An inter vivos trust, which takes effect during the life of the pet owner, can provide for the care of the animal in the event that the pet owner becomes incapacitated, as well.

A pet trust also takes the various advantages that a trust has as compared to a Will, when it comes to caring for a vulnerable beneficiary, and expressly applies them to the care of pets and other animals:9

Bequests in a Will are geared towards disbursing property in one shot after probate of the Will - not in ongoing steps over a period of time. By contrast, that is precisely the function of a pet trust.

Wills have an inherent time gap between the testator's death and probate during which there is nothing in place to govern what happens. In the meantime, who cares for the pet and where will the pet stay? By contrast, an inter vivos pet trust remains in effect seamlessly during the pet owner's life, at the moment of death, and after death, with no interruption.

Because the probate process necessarily puts the Will before a judge for confirmation, it increases the possibility that a Court will tinker with the Will's pet care provisions. By contrast, a free-standing inter vivos pet trust is a private document that needs no judicial confirmation or intervention.10

Wills do not put care in place for pets during the owner's lifetime if the owner suffers illness or incapacity. By contrast, this is precisely what an inter vivos pet trust can do.

Pet provisions in a Will may be considered "honorary" or "precatory" and, therefore, unenforceable.11 By contrast, a pet trust allows owners to expressly establish trust accounts for the ongoing care and maintenance of their domestic or companion animals, with safeguards in place to ensure compliance.

Like other trusts, a pet trust can - and, perhaps, should - be very specific.12 The trust may name one or more veterinarians to care for the pets, state how the trustee will finance the caretaker's pet expenses, and indicate how often the trustee should visit the caretaker and pets to ensure that the trust's terms are being followed. It should detail how the pets should be maintained, and can specify the particular brand of food the pet prefers, or specify that the pet likes to play frisbee in the park. Since pet owners know the particular habits and preferences of their companion animals better than anyone else, they can describe the exact kind of care their pets should have and identify the individuals who should be involved in that care.

Overcoming the Rule Against Perpetuities

One of the reasons that special pet trust laws are required is to overcome a significant obstacle to effective estate planning for pet owners: the Rule Against Perpetuities, which requires that a trust be measured in human lives. Over the years, many state courts ruled that the life of a domestic or companion animal could not be used to sustain a legal trust agreement. As a result of this prohibition, many early decisions involving pet care trusts held that the trusts were only honorary, and therefore technically unenforceable.13

Pet trusts are exempt from the rule against perpetuities. This makes sense if you consider that some pets have a very long lifespan. While some states limit the maximum duration of the trust to 21 years, New York allows the trust to continue for the life of the pet without regard to such a 21 year limit.14 This is important for animals that have an extended life expectancy, such as horses (40 years), parrots (as much as 100+ years), and turtles (over 120 years).15

Pet trust statutes have been enacted by all 50 states

All fifty states and the District of Columbia have enacted some form of pet trust law.16 New York's is codified in Estates, Powers and Trusts Law ("EPTL") Section 7-8.1.17 The statute has six main parts, providing:

1. That such a trust is valid for the care of a "domestic or pet animal." This is generally considered to include dogs, cats, birds, guinea pigs, hamsters, fish, rabbits, lizards, horses, turtles and tortoises, even other domestic animals.18

2. That a person can be appointed with the ability to enforce the terms of the trust.19

3. That the trust terminates upon the death of the animal or animals for which it was created.20

4. That, upon the trust's termination, the trustee shall transfer the remaining trust property as directed in the trust instrument or, if there are no such directions in the trust instrument, the property shall pass to the estate of the grantor.

5. That a court may lower the amount of money to be transferred into the trust for the pet's care if the amount is unreasonably large.

6. That the court may appoint a trustee if no trustee is designated or no designated trustee is willing or able to serve.

Alternative options

Other options exist for those who do not want to create a pet trust, or whose state does not have a pet trust law. Here are a few examples:

Believe it or not, there are pet retirement homes. Some are sponsored by schools for veterinary medicine, for example Purdue University, University of Minnesota, Oklahoma State University's Center for Veterinary Health Sciences, and Texas A&M University's Stevenson Companion Animal Life Care Center; others are privately operated.21 The requirements of the particular organization should be researched.

It may also be possible to create a pet trust by establishing a connection with a state that has a suitable pet trust law, such as the state in which the trustee or caretaker lives, the state in which the chosen pet retirement home or charitable organization is located, or some other basis. A lawyer in that other jurisdiction should be consulted if a client wishes to explore this option.

Arrangements could be made with a humane society, animal rescue group or animal rest home to take possession and care of the pet.

Pet Powers of Attorney

Given the degree of planning we do for our clients so that all kinds of contingencies are addressed, we might consider adding a paragraph like the one below in our Durable Powers of Attorney, or even doing a separate Pet Power of Attorney, appointing an agent to handle pet situations:

I, (name of owner), do hereby appoint my (relationship, name,

address and all telephone numbers of agent) my attorney-in-fact

to act in my place and stead in any way which I myself could do if I

were personally present with respect to the following matters, to the

extent that I am permitted by New York law to act through an agent:

to care for any animals I have and to follow the instructions in a pet

trust, if I have one; to prepare a pet trust if I do not have one or if the

It is important for pet owners to have instructions for the care of their pets readily available in the event of an emergency. This is particularly true for people who live alone (that is, without human roommates or family). The New York City Bar Association's Committee on Legal Issues Pertaining to Animals even recommends that pet owners carry a copy of instructions in their purse or wallet indicating what happens to their pets in the event of an emergency, disability or death, with information on who should be called in the case of emergency, how they can be contacted, and what arrangements should be made.23

Conclusion

Pet trusts enable us to set aside assets, knowing that they will be applied for the care and maintenance of our animal friends when we can no longer provide the care ourselves due to disability or death. Such trusts are the best choice to ensure ongoing care for our pets, while giving us peace of mind.

SAMPLE TRUST FORM

The following is a sample trust for the care of dogs and cats based on the form suggested by the New York City Bar Association, Committee on Legal Issues Pertaining to Animals:

I give the sum of Fifty Thousand Dollars ($50,000) and all of my dogs, cats, and any other animals of mine living at the time of my death to the trustee hereunder, IN TRUST, for the following purposes and subject to the following terms and conditions:

This trust is created pursuant to New York Estates, Powers and Trusts Law Section 7-8.1 for the benefit of all of my dogs, cats, and any other animals of mine living at the time of my death (the "Beneficiaries" herein).

The trust shall terminate upon [the earlier to occur of the following events:] the last to die of the Beneficiaries [, or if required by New York law, twenty-one (21) years from the date of my death].

During the term of the trust, the trustee shall apply for the benefit of the Beneficiaries, any or all of the net income of the trust and so much or all of the principal of the trust from time to time, as the trustee shall in the trustee's discretion determine to be advisable for the care, including veterinary care, of the Beneficiaries. Any income accrued but not distributed for the benefit of the Beneficiaries shall be added to the principal of the trust.

[Describe details of care, specific instructions, and veterinarians and other individuals to be involved with the Beneficiaries' care]

I appoint (name and address) to be the trustee of such trust. If such person has predeceased me or for any other reason is unable to act as such trustee, I appoint (name and address) to be the trustee of such trust.

I designate (name and address) to be the caretaker of the Beneficiaries. If such person has predeceased me or for any other reason is unable to act as such caretaker, I designate (name and address) to be the caretaker of the Beneficiaries. If such person has predeceased me or for any other reason is unable to act as such caretaker, the trustee shall select another person to act as caretaker of the Beneficiaries. The Trustee, in the trustee's discretion, may pay a stipend from the trust to the person acting as such caretaker.

I designate (name and address), as the person to enforce the trust, if necessary. If such person has predeceased me or for any other reason is unable to act in this capacity, I designate (name and address) as the person to enforce the trust, if necessary.

I am creating this trust to provide for the care of my animals and the trustee does not need to consider the interests of the remainderman when making distributions. The trustee, in the trustee's discretion, may use all of the trust property for the benefit of my animals; even if the result is that nothing will pass to the remainderman.

Upon the termination of the trust, if any property remains in the trust at the time of termination, the trustee shall distribute any such income and/or principal to (name of trust remainderman-charity that rescues animals recommended), located at (address). If such charitable organization is not in existence at the time of termination, I give the trust remainder, if any, to a charitable organization that benefits animals [described in Section 170(c) and 2055(a) of the Internal Revenue Code], to be selected by the trustee.

Id.

This article originally appeared in the Winter 2017 edition of Laws & Paws, a publication of the New York State Bar Association's Committee on Animals and the Law. The article has been updated since that time to reflect the most current changes in the law. (6/18)

“81% of those surveyed consider their dogs to be true family members, equal in status to children” . . . Coren, Stanley, Ph.D., F.R.S.C., Do We Treat Dogs The Same Way As Children In Our Modern Families? Psychology Today, May 2, 2011, available at http://www.psychologytoday.com/blog/canine-corner/201105/do-we-treat-dogs-the-same-way-children-in-our-modern-families; the 1999 American Animal Hospital Association (AAHA) Pet Owner Survey shows that 84% refer to themselves as their pets’ “Mommy” and “Daddy”, available at www.peteducation.com/article.cfm?c=22+1275&aid=1265; “Pet owners are extremely devoted to their animal companions with 80% bragging about their pets to others, 79% allowing their pets to sleep in bed with them, 37% carrying pictures of their pets in their wallets, and 31% taking time off from work to be with their sick pets . . . . The number of [households with pets] is staggering [with almost 100 million U.S. households having pets that include dogs, cats, fish, birds, small animals (such as hamsters and rabbits), and reptiles]. An owner's love for his pet transcends death, as documented by studies revealing that between 12% and 27% of pet owners include pets in their wills.”Beyer, Gerry W., Pet Animals: What Happens When Their Humans Die? 40 Santa Clara Law Rev. 617 (2000)(footnotes omitted), available at http://www.animallaw.info/articles/arus40sanclr617.htm.↵

Pets for Senior Citizens, HealthyPet.com, available at http://www.healthypet.com/petcare/PetCareArticle.aspx?title=Pets_for_Senior_Citizens , last viewed March 3, 2013. See, generally, articles on the benefits of pet interactions reported at PetPartners.org, including Rider, Tiffany, Man’s Best Friend: Dog Ownership Proven to Reduce Blood Pressure, Other Health Risks, Long Beach Business Journal, available at http://lbbusinessjournal.com/long-beach-business-journal-newswatch/119-lof-scroller-articles-12-05-22/590-mans-best-friend-dog-ownership-proven-to-reduce-blood-pressure-other-health-risks.html.↵

Pets for Senior Citizens, HealthyPet.com, available at http://www.healthypet.com/petcare/PetCareArticle.aspx?title=Pets_for_Senior_Citizens; Hirschfeld, Rachel, Ensure Your Pet’s Future: Estate Planning for Owners and their Animal Companions, Elder's Advisor, Marquette University Law School, Vol. 9, No. 1 at 155, 155-56 (2007) available at http://www.animallaw.info/articles/art_pdf/arus9marqeldersadvisor155.pdf, citing studies on the benefits of pet ownership from the Delta Society, available at: deltasociety.org.↵

Recent examples include the $12 million trust fund (later reduced to $2 million by the Surrogate’s Court) left by real estate mogul Leona Helmsley to care for her Maltese poodle named Trouble, and the $8.3 million Miami mansion and more than $3 million for care left by Florida heiress Gail Posner for her Chihuahua, Conchita, and two other dogs. Yet those two examples do not even come close to the case of Gunther IV, a German Shepard, that inherited $124 million from his father Gunther III, who inherited his wealth from German countess Karlotta Liebenstain when she died in 1992.↵

Sample Will provisions suggested by the New York City Bar Association, Committee on Legal Issues Pertaining to Animals, are available at http://www.nycbar.org/media-aamp-publications/brochuresbooks/providing-for-your-petsnin-the-event-of-your-death-or-hospitalization.↵

I.e., for purposes of this discussion, and to isolate the outcome of a Will alone, this assumes a Will without trust provisions.↵

The Surrogate’s Court always has jurisdiction over any trust, of course, but the likelihood of interference is the point here.↵

See, e.g., The Fidelity Title and Trust Co. v. Clyde, 143 Conn. 247, 121 A.2d 625 (1956)(honorary or precatory language unenforceable, therefore not a true trust); Phillips v. Estate of Holzmann, 740 So.2d 1 (Fla. Dist. Ct. of App., 3d Dist. 1998)(The true beneficiary is the pet, making this an honorary trust, “not a true trust”, and therefore not enforceable). As a recent article put it: “In the . . . states without statutory pet trusts . . . [t]he person who receives the funds decides whether or not to use them for the pet’s care. There is nothing to prohibit the [person] from dumping the pet at the pound and using the money to go to Paris.” See also Hirschfeld, Rachel, Estate Planning Issues Involving Pets, available at https://www.americanbar.org/newsletter/publications/gp_solo_magazine_home/gp_solo_magazine_index/petestateplanning.html.↵

A sample trust for the care of dogs and cats based on the form suggested by the New York City Bar Association, Committee on Legal Issues Pertaining to Animals, is annexed at the end of this article. ↵

See, e.g., The Fidelity Title and Trust Co. v. Clyde, supra;Phillips v. Estate of Holzmann, supra. See Beyer, Pet Animals: What Happens When Their Humans Die? supra, at 635-39.↵

The statute provides:
§ 7-8.1 Trusts for pets
(a) A trust for the care of a designated domestic or pet animal is valid. The
intended use of the principal or income may be enforced by an individual designated
for that purpose in the trust instrument or, if none, by an individual appointed by a
court upon application to it by an individual, or by a trustee. Such trust shall terminate
when the living animal beneficiary or beneficiaries of such trust are no longer alive.
(b) Except as expressly provided otherwise in the trust instrument, no portion
of the principal or income may be converted to the use of the trustee or to any use other
than for the benefit of all covered animals.
(c) Upon termination, the trustee shall transfer the unexpended trust property
as directed in the trust instrument or, if there are no such directions in the trust instru-
ment, the property shall pass to the estate of the grantor.
(d) A court may reduce the amount of the property transferred if it determines
that amount substantially exceeds the amount required for the intended use. The amount
of the reduction, if any, passes as unexpended trust property pursuant to paragraph (c)
of this section.
(e) If no trustee is designated or no designated trustee is willing or able to serve,
a court shall appoint a trustee and may make such other orders and determinations as are
advisable to carry out the intent of the transferor and the purpose of this section.
(Formerly § 7-6.1, added L.1996, c. 159, § 1. Renumbered § 7-8.1 L.2003, c. 630, § 3, eff. March 28, 2004. Amended L.2010, c. 70, § 1, eff. May 5, 2010.)
↵

“Domestic animal” is defined at New York Agriculture and Markets Law § 108 as “any domesticated sheep, horse, cattle, fallow deer, red deer, sika deer, whitetail deer which is raised under license from the Department of Environmental Conservation, llama, goat, swine, fowl, duck, goose, swan, turkey, confined domestic hare or rabbit, pheasant or other bird which is raised in confinement under license from the State Department of Environmental Conservation before release from captivity, except . . . fowl commonly used for cock fights . . . .” “Pet” and “companion animal” are defined at New York Agriculture and Markets Law § 350 (5) as “any dog or cat, and . . . any other domesticated animal normally maintained in or near the household” but does not include a “farm animal” which is defined in §350(4) as “any ungulate, poultry, species of cattle, sheep, swine, goats, llamas, horses or furbearing animals [i.e., beaver, bobcat, coyote, raccoon, sable or marten, skunk, otter, fisher, nutria and muskrat], which are raised for commercial or subsistence purposes. Furbearing animals shall not include dogs or cats.”↵

The legislative history reveals that the limitation of 21 years was removed in favor of whatever the lifetime of the animal is. Subd. (a). L.2010, c. 70, § 1, in the last sentence, substituted “the living animal beneficiary or beneficiaries of such trust are no longer alive” for “no living animal is covered by the trust, or at the end of twenty-one years, whichever occurs earlier”.↵

See U.S. News and World Report, Health News, available at http://health.usnews.com/health-news/family-health/brain-and-behavior/articles/2011/04/01/when-pets-outlive-owners-retirement-homes-offer-refuge.↵

The following is a sample note recommended by the New York City Bar Association, Committee on Legal Issues Pertaining to Animals, intended to be carried in a purse or wallet, regarding emergency care of pets:
In any situation in which I am unable to return home to feed my pets, such as my
hospitalization or death, please immediately call [Mary Smith] at [address and phone]
or [John Doe] at [address and phone], to arrange for the feeding of my [cats] located
in my home at [address]. The superintendent of my apartment building [name, address
and phone], my Executor [name, address and phone], and my neighbor [name, address
and phone] have a copy of this document.
New York City Bar Association, Committee on Legal Issues Pertaining to Animals, available at http://www.nycbar.org/media-aamp-publications/brochuresbooks/providing-for-your-petsnin-the-event-of-your-death-or-hospitalization.
↵